Placing a Price on Medical Device Innovation: The Example of Total Knee Arthroplasty

Abstract

Background:Total knee arthroplasty (TKA) is common, effective, and cost-effective. Innovative implants promising reduced long-term failure at increased cost are under continual development. We sought to define the implant cost and performance thresholds under which innovative TKA implants are cost-effective.Methods:We performed a cost-effectiveness analysis using a validated, published computer simulation model of knee osteoarthritis. Model inputs were derived using published literature, Medicare claims, and National Health and Nutrition Examination Survey data. We compared projected TKA implant survival, quality-adjusted life expectancy (QALE), lifetime costs, and cost-effectiveness (incremental cost-effectiveness ratios or ICERs) of standard versus innovative TKA implants. We assumed innovative implants offered 5-70% decreased long-term TKA failure rates at costs 20-400% increased above standard implants. We examined the impact of patient age, comorbidity, and potential increases in short-term failure on innovative implant cost-effectiveness.Results:Implants offering ≥50% decrease in long-term TKA failure at ≤50% increased cost offered ICERs